How I'm thinking about fundraising vs bootstrapping

Since I moved to Silicon Valley, the question people ask isn't "how much are your profits?" It's "how much have you raised?" At first this felt weird to me. I come from a bootstrapped, profit-first mindset. I always thought revenue and margins were what mattered.

But out here, everyone judges you by the fundraising number. It's like business success is only measured by how much money you've taken from investors. So I've been thinking about this a lot lately. Not because I need to raise, I don't. But because I want to be clear on how I'm actually thinking about it.

I'll start with the criticism because that's where my head was for a long time.

Fundraising is hard. It's like having another full-time job on top of being a founder. You're pitching, taking meetings, doing due diligence, negotiating terms. All of that takes focus away from actually building the business.

And there's the freedom thing. You started a business because you wanted to be free. Why would you go get a boss again? Investors have opinions and timelines. Their interests might not be aligned with yours.

Plus, does your company actually need the money? Or do you just need to be more creative and frugal? Most companies don't need to raise. They just need to stop spending on stuff that doesn't matter.

Bootstrapping also has its problems. You waste a lot of time trying to build and sell at the same time. A little cash injection lets you skip a couple of steps. You can hire faster, move faster, and test faster.

It's also just harder. Bootstrapping takes longer, which means you have higher chances of giving up. It's easy to get demotivated when everything takes so much time. And investors aren't just money. They come with knowledge and networks. If you don't know what you're doing, that might actually matter.

Here's the thing though. We 10x'd revenue this year, more than doubled the team size, sent over 10 million emails, and made our clients over $5M in sales while bootstrapped. So on one hand, that feels like proof that I don't need funding. The business works and we can grow without it.

But I also learned something else this year. Scaling a team is messy. We hired fast because we needed to then we scaled back down. Some people finished their projects, one person left for another opportunity, a few we let go because of misalignment.

If we'd raised money, would that have gone smoother? Honestly, I don't think so. I think we would have just hired even faster and made bigger, more expensive mistakes. Money doesn't solve the hard parts. The hard parts are communication, alignment, knowing who to hire, and knowing when to let someone go. You can't buy your way out of those. You just have to figure them out.

So when I look at what actually happened this year, I don't see a lack of funding holding us back. I see us learning how to run a company and I think that learning is more valuable than a cash injection right now.

So the first question I asked myself was simple: do I even need to raise? And the honest answer is no. I don't need to. We're profitable and growing. We hit our money goals this year for the first time. The business works.

So if I'm being honest, raising right now would mostly be an ego thing. It sounds good and feels like validation. But I don't actually need the cash to keep going. That said, I'm not ruling it out forever.

If I do raise, it has to be worth it. A $50k-300k seed round wouldn't make a dent for us. It's not enough to meaningfully change what we can do. So a seed round feels kind of pointless. If I raise, I'd skip straight to Series A. That's when the funds and the connections would actually matter and I'd be able to put them to use. But I'm not there yet. So until then, I'm bootstrapping.

This is actually the question that keeps me grounded. If someone handed me $2M tomorrow, where would it go? I'm not totally sure and I think that's a sign.

I could hire faster. But we just learned this year that hiring fast doesn't mean hiring right. I could spend more on marketing but we've grown entirely through word of mouth so far so it’s not a priority. I could invest more in the product but our clients basically build our roadmap anyway - they tell us what to build and we build it.

So when I really think about it, I don't have a clear picture of how funding would change what we're doing. It might just speed things up but faster isn't always better. Faster can mean more chaos, more mistakes, more things breaking before you understand why.

I think if you can't clearly articulate what you'd do with the money, you probably shouldn't take it yet. Otherwise you're just raising to raise.

Like I said earlier, I’m not against raising forever. I've actually been thinking about what would need to be true for me to go pursue a Series A, and it boils down to a few things:

First, I'd need to know exactly what I'd spend it on. Not vaguely "growth" or "hiring." Specific things, specific hires, and specific bets. If I can't name them, I'm not ready.

Second, I'd need to hit a point where the opportunity is clearly bigger than what bootstrapping can capture. Right now we're growing fast and the market is big, but I don't feel like we're leaving huge opportunities on the table because we don't have funding. If that changes and I see a clear gap between where we are and where we could be with capital then I'd think about it differently.

Third, the right investors. I'd want people who actually understand what we're building and aren't just trying to push us toward some generic playbook. I've seen too many founders take money from people who don't get their business and then spend all their time managing investor expectations instead of building. Until those three things are true, I'm staying bootstrapped.

I'm betting on product and positioning. I think those are the two most important factors in whether a startup succeeds. Not how much you've raised. Not how big your team is. Just - is your product good, and do people understand what it is?

So that's where I'm putting my time. Getting results for clients. Making the service better. Building in public so people know what we're about. Fundraising is addicting. It's tempting. It feels like it would solve all your problems for a while. And it's good for your ego. That's exactly why I'm trying to be rational about it.

I'm 19. I have time. I'd rather spend the next year or two getting the fundamentals right than chasing a round I don't actually need.

This week's action:

Before you think about raising, answer two questions honestly:

If you can't answer both clearly, you're probably not ready.